1 of 17 Pages
Exhibit Index
Appears on page 15
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the quarterly period ended May 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to .
Commission File Number: 1-4404
THE STRIDE RITE CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-1399290
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
191 Spring Street, Lexington, Massachusetts 02173
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-824-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.25 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
As of July 9, 1996, 49,604,397 shares of the registrant's common stock, $.25
par value, and the accompanying Preferred Stock Purchase Rights were
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
<TABLE>
<CAPTION>
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
May 31, June 2,
1996 December 1, 1995
(Unaudited) 1995 (Unaudited)
Assets
Current Assets:
<S> <C> <C> <C>
Cash and cash equivalents $31,834 $ 28,130 $ 18,688
Short-term investments 25,615 26,211 32,511
Accounts and notes
receivable, net 72,965 48,066 94,047
Inventories:
Finished goods 104,054 141,914 122,908
Work in process 857 863 1,010
Raw materials 2,992 2,721 3,400
107,903 145,498 127,318
Deferred income taxes
and prepaid expenses 44,649 44,458 39,761
Total current assets 282,966 292,363 312,325
Property and equipment, net 59,398 60,434 51,665
Other assets 11,401 13,819 21,554
Total assets $353,765 $366,616 $385,544
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
2
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars In Thousands)
May 31, June 2,
1996 December 1, 1995
(Unaudited) 1995 (Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities:
Current maturities of long-term
<S> <C> <C> <C>
debt $ 833 $ 833 $ 833
Short-term debt - - 9,200
Accounts payable 10,240 22,963 12,958
Income taxes payable 24,693 19,492 31,589
Accrued expenses and other
liabilities 38,826 44,290 29,072
Total current liabilities 74,592 87,578 83,652
Deferred income taxes 10,749 10,749 8,132
Long-term debt 833 833 1,667
Stockholders' Equity:
Preferred stock, $1 par value
Shares authorized - 1,000,000
Shares issued - None - - -
Common stock, $.25 par value
Shares authorized - 135,000,000
Shares issued - 56,946,544 14,237 14,237 14,237
Capital in excess of par value 22,780 23,006 23,419
Retained earnings 322,997 323,566 348,138
Less cost of 7,342,147 shares of
common stock held in treasury
(7,416,037 on December 1, 1995
and 7,049,841 on June 2, 1995) (92,423) (93,353) (93,701)
Total stockholders' equity 267,591 267,456 292,093
Total liabilities and
stockholders' equity $353,765 $366,616 $385,544
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the periods ended May 31, 1996 and June 2, 1995
(In Thousands Except Per Share Data)
Three Months Ended Six Months Ended
May 31, 1996 June 2, 1995 May 31, 1996 June 2, 1995
<S> <C> <C> <C> <C>
Net sales $124,185 $144,386 $243,084 $279,158
Cost of sales 81,256 92,542 160,402 176,716
Selling and administrative
expenses 38,608 44,904 76,004 87,278
Operating income 4,321 6,940 6,678 15,164
Other income (expense):
Interest income 707 721 1,469 1,625
Interest expense (313) (424) (628) (711)
Other, net (527) (620) (1,310) (1,407)
(133) (323) (469) (493)
Income before income taxes 4,188 6,617 6,209 14,671
Provision for income
taxes 1,176 2,616 1,819 5,695
Net income $ 3,012 $ 4,001 $ 4,390 $ 8,976
Net income per
common share $.06 $.08 $.09 $.18
Dividends per common share $.05 $.095 $.10 $.19
Average common shares
and common equivalents
outstanding during
the period 49,870 49,860 49,827 49,854
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
4
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the six months ended May 31, 1996 and June 2, 1995
(Dollars In Thousands)
May 31, 1996 June 2, 1995
Cash was provided from (used for) Operations:
<S> <C> <C>
Net income $4,390 $8,976
Adjustments to reconcile to net cash provided from (used for) operations:
Depreciation and amortization 5,577 5,084
Deferred income taxes, net 179 -
Equity in loss (earnings) of affiliate 373 (329)
Loss on disposal of property and equipment 1,239 -
Changes in:
Accounts and notes receivable (24,899) (30,644)
Inventories 37,595 29,510
Prepaid expenses (371) (1,788)
Accounts payable, income taxes, accrued
expenses and other current liabilities (12,306) (19,632)
Net cash provided from (used for) operations 11,777 (8,823)
Investments:
Short-term investments 596 (1,977)
Additions to property and equipment (4,941) (7,182)
Proceeds from sales of property and equipment 227 -
Distributions and dividends from long term
investments 2,359 -
Acquisition of business - (5,308)
Increase in other assets (1,372) (3,015)
Net cash used for investments (3,131) (17,482)
Financing:
Proceeds from sale of stock under stock plans 13 10
Cash dividends paid (4,955) (9,411)
Repurchase of common stock - (219)
Short-term debt - 9,200
Net cash used for financing (4,942) (420)
Net increase (decrease) in cash and cash equivalents 3,704 (26,725)
Cash and cash equivalents at beginning of the period 28,130 45,413
Cash and cash equivalents at end of the period $31,834 $18,688
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
5
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
The financial information included in this Form 10-Q of The Stride Rite
Corporation (the "Company") for the periods ended May 31, 1996 and June 2, 1995
is unaudited and subject to year-end audit adjustments. However, such
information includes all adjustments (including all normal recurring
adjustments) which, in the opinion of management, are considered necessary for a
fair presentation of the consolidated results for those periods. The results of
operations for the period ended May 31, 1996 are not necessarily indicative of
the results of operations that may be expected for the complete fiscal year. The
year-end condensed balance sheet data was derived from the audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. Certain reclassifications have been made to the 1995
condensed consolidated financial statements to conform to the fiscal 1996
presentation.
NOTE 2
During the first six months of fiscal 1996, interest payments amounted to
$553,000 ($704,000 in 1995). For the first six months of 1996, the Company
received net refunds of income taxes amounting to $3,562,000. In the first half
of fiscal 1995, payments for income taxes totaled $7,349,000.
6
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements contained in this Item 2 are "forward-looking
statements" within the meaning of the Private Securities Reform Act of 1995 and
are thus prospective. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward- looking
statements. Readers are referred to Exhibit 99 to the Company's Quarterly Report
on Form 10-Q for the fiscal period ended March 1, 1996 for a discussion of some
of such factors.
Results of Operations
The following table summarizes the Company's performance for the second
quarter and six-month period:
Percent Increase (Decrease) vs. 1995 Results:
<TABLE>
Second Quarter Six Months
<S> <C> <C>
Net sales (14.0%) (12.9%)
Gross profit (17.2%) (19.3%)
Selling and administrative
expenses (14.0%) (12.9%)
Operating income (37.7%) (56.0%)
Income before income taxes (36.7%) (57.7%)
Net income (24.7%) (51.1%)
</TABLE>
Operating Ratios as a Percentage of Net Sales:
<TABLE>
Second Quarter Six Months
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Gross Profit 34.6% 35.9% 34.0% 36.7%
Selling and administrative
expenses 31.1% 31.1% 31.3% 31.3%
Operating income 3.5% 4.8% 2.7% 5.4%
Income before income taxes 3.4% 4.6% 2.6% 5.3%
Net income 2.4% 2.8% 1.8% 3.2%
</TABLE>
7
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations (cont'd)
Net sales in the second quarter of fiscal 1996 decreased $20.2 million
(14%) from the net sales level achieved in the comparable period of fiscal 1995.
For the first six months of fiscal 1996, consolidated net sales were below last
year by $36.1 million or 12.9%. A 16% decline in revenues from the Company's
wholesale divisions during the first half of fiscal 1996 was partially offset by
increased retail sales in the latest six-month period. With respect to the
wholesale divisions of the Company, unit shipments of current line merchandise
during the first six months of 1996 were down 9% from the 1995 first half
shipment total. Lower sales of discontinued products, down 49% in the second
quarter and 17% in the six months, a slight decline in average selling price and
increased promotional allowances at Keds also contributed to the sales decrease
in the first half of 1996. Excluding the impact of product mix changes, net
sales in the six months increased by approximately $1.1 million due to selling
price inflation.
The sales decline in the Company's wholesale businesses during the second
quarter and first half of fiscal 1996 was largely caused by lower revenues of
the Keds division. Keds' sales were down 17% in the second quarter of 1996 and
were below last year by 21% for the six-month period. A 15% increase in reorders
in the second quarter of 1996 was insufficient to offset the impact of lower
advance bookings for the Spring season. Entering fiscal 1996, the backlog of
advance orders for Keds products, calling for shipment in the first quarter of
1996, was below last year reflecting the Spring 1996 sales policies for Keds
core products, which emphasized the division's quick-response reorder
capabilities. This policy change is intended to shift product deliveries closer
to the retail selling season resulting in lower retailer inventories and
improved customer profitability. In fiscal 1996, due to this policy change,
Keds' success in the Spring season depended, more heavily than in past years, on
retail sell-through performance and the resulting reorder activity in the second
quarter. The other business units of the Company also posted weak sales results
in the second quarter of 1996, with the latest period's performance offsetting
the sales gains experienced in the first quarter of the fiscal 1996. For the
first six months of 1996, sales of the Stride Rite Children's Group to
independent dealers and department stores decreased 8% from 1995. Sales of the
Sperry Top-Sider division in the first six months of 1996 were even with 1995
due to late deliveries of product and low inventory levels which prevented the
division from fully capitalizing on a
8
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations (Continued)
favorable reaction to Sperry's Spring 1996 product line. For the first half of
1996, the Company's International division experienced a sales decrease of 11%
from the sales level achieved in the first six months of 1995.
For the first half of fiscal 1996, sales of the Company's Retail division,
which includes the Stride Rite children's booteries and leased departments,
manufacturers' outlets and the initial stores of the Great Feet(TM) and Keds
retail concepts, increased 5% from the first six months of 1995 as a more
productive store mix offset the impact of store closings and a 1.1% decline in
sales at comparable stores. During the first six months of 1996, the Retail
division operated an average of 241 stores, down 9% from the total of 264 stores
operated during the same period of 1995. Average store sales volumes improved
during the first half of 1996 following the closing of 28 lower volume leased
departments during the fourth quarter of fiscal 1995. During the first six
months of 1996, the Company also eliminated 23 of the 48 underperforming retail
operations which were targeted for closing in 1996 as part of the Company's
restructuring plan. At the end of the second quarter of 1996, the Retail
division had 234 stores compared to 278 stores in May 1995.
During the first six months, gross profit declined 19.3% compared to the
sales decline of 12.9%. Gross profit was also lower in the second quarter of
1996, showing a decrease of 17.2%, while sales declined by 14% as compared to
the second quarter of 1995. The consolidated gross profit percent in the six
months decreased to 34% in 1996 from the 36.7% rate recorded in the first half
of 1995. The gross profit rate for the second quarter of 1996 was also below
last year, 34.6% in 1996 compared to 35.9% in 1995. The LIFO provision reduced
gross profit by $2.8 million (1.1% of net sales) in 1996 six-month period
compared to a provision of $2 million (0.7% of net sales) in the first half of
1995. The reduced importance of Keds sales, especially in the higher margin,
Champion(R) canvas product category, to consolidated sales contributed to the
decline in gross profit percent between the 1996 and 1995 periods. Gross profit
performance in the second quarter and first half of 1996 was also hurt by the
cost of special promotions to help the retail sell-through of Keds products
during the Spring and early Summer selling periods. Unfavorable variances
related to domestic manufacturing operations, which included the phase-out of a
9
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations (Continued)
children's facility in Missouri, reduced gross profit in the first half of 1996
by 1.1 percentage points, an increase from the unfavorable manufacturing
variances of 0.5 points experienced during the comparable period of 1995. The
consolidated gross profit percent was favorably impacted in 1996 by the
increased contribution to sales of the Retail division, the portion of the
Company with the highest gross profit percentage, as retail sales accounted for
17.7% of consolidated net sales in 1996 compared to 14.7% of sales in the first
six months of 1995.
Selling and administrative expenses in the first six months of fiscal 1996
decreased $11.3 million or 12.9% from the spending level incurred during the
same period of fiscal 1995. In the second quarter of 1996, selling and
administrative expenses decreased $6.3 million or 14% below the 1995 total. As a
percentage of sales, these expenses represented 31.3% of net sales in 1996,
similar to the spending rate experienced in the first half of 1995. Lower
advertising spending accounted for more than half of the expense reduction.
Advertising expenses in the first six months of 1996 totaled $13.3 million (5.5%
of sales), down $6.9 million from the spending level of $20.2 million (7.2% of
sales) in the 1995 period. While distribution costs decreased $0.5 million or 4%
from the first six months of 1995, these costs represented 4.3% of sales in the
first half of 1996 compared to 3.9% in 1995. Retail store expenses in the first
six months of 1996 increased $0.5 million with all of the increased costs
related to new stores opened in fiscal 1995. Other selling and administrative
costs in the first half of 1996 decreased $4.4 million or 11.7% from the
comparable period in 1995 due to the lower sales level experienced in the
wholesale divisions and the actions initiated in the second half of 1995 to
consolidate certain administrative functions and to reduce overall spending.
Efforts are being focused on further streamlining of the Company's business
processes in order to reduce the expense structure.
Other income (expense) decreased pre-tax income by $0.5 million in each of
the 1995 and 1996 six-month periods. Interest income during the first half of
1996 was below last year by $0.2 million due to decreased short-term investment
yields. Interest expense in the first six months of 1996 was below the 1995
expense level due to lower interest rates (5.9% in 1996 compared to 6.3% in
1995). Other expenses, which are primarily
10
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations (Continued)
related to the costs of a company-owned life insurance program, decreased $0.1
million in the first half of 1996 from the expense level in the comparable
period of fiscal 1995. The provision for income taxes in the first half of 1996
was below that for the first half of 1995 primarily due to the lower pre-tax
income. The 1996 effective income tax rate of 29.3% was below the 1995 rate of
38.8% as the increased impact of tax savings related to the company-owned life
insurance program offset a higher state income tax rate.
During the first half of fiscal 1996, net income decreased $4.6 million or
57.1% because of the sales decline and lower gross profit performance described
above. At May 31, 1996, order backlog supporting second half business was down
21% from the June 2, 1995 backlog position. A weak response to the new items in
the Keds Fall 1996 line has negated order gains in the Stride Rite and Sperry
Top-Sider business units. In order to partially offset this weakness, the
Company will continue to support aggressive retail promotions over the next six
months to produce additional demand for the classic Keds Champion(R) style.
Liquidity and Capital Resources
At May 31, 1996, the Company's balance sheet reflects a current ratio of
3.8 to 1 and a debt-to-equity relationship of 0.3%. The Company's cash and
short-term investments totaled $57.4 million at the end of the quarter, above
the fiscal year-end 1995 level of $54.3 million and the cash and investments
balance of $51.2 million as of June 2, 1995. During the first six months of
1996, the Company's operations generated $11.8 million of cash as compared to a
use of funds of $8.8 million in the first half of 1995.
At May 31, 1996, inventory and receivable levels totaled $180.9 million,
down $40.5 million or 18% from the $221.4 million amount at the end of the first
half of 1995. Inventory levels at May 31, 1996 were down $19.4 million or 15.2%
from the total at June 2, 1995 as Stride Rite and Sperry Top-Sider inventories
were reduced from levels maintained in 1995. Receivables were also lower at May
31, 1996, with the decrease from the 1995 level caused by the lower sales level
experienced in the first half of 1996.
11
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources (Continued)
The Company uses bank lines of credit to fund seasonal working capital
needs. No short-term borrowings were outstanding at May 31, 1996, as compared to
the $9.2 million debt level at June 2, 1995. Average outstanding borrowings
under these lines of credit during the first six months of fiscal 1996 amounted
to $18.3 million compared to $18.8 million in the comparable period of fiscal
1995.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of the Company's shareholders was held during the second
quarter, on April 23, 1996. The two Directors nominated by management were
elected by the vote set forth below.
Votes
Name of Director For Withheld
Margaret A. McKenna 41,697,792 1,578,462
Jeanette S. Wagner 41,697,195 1,579,059
The Company's shareholders also ratified the Company's selection of Coopers &
Lybrand, L.L.P. as auditors of the Company for the 1996 fiscal year, by the vote
set forth below:
Votes
For Against Abstentions No Vote
42,903,498 210,344 162,411 1
The Company's shareholders also voted to approve a precatory shareholder
proposal, by the vote set forth below:
Votes
For Against Abstentions No Vote
22,488,801 11,428,183 1,452,996 7,906,274
12
<PAGE>
PART II - OTHER INFORMATION(Continued)
THE STRIDE RITE CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following Exhibits are contained herein:
Exhibit No. Description of Exhibit
11 Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any current reports on Form 8-K during
the second quarter of fiscal year 1996.
13
<PAGE>
THE STRIDE RITE CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed
on its behalf by the undersigned duly authorized.
THE STRIDE RITE CORPORATION
(Registrant)
Date: July 12, 1996 By:/s/ John M. Kelliher
John M. Kelliher
Vice President, Finance,
Treasurer, and Corporate Controller
14
<PAGE>
THE STRIDE RITE CORPORATION
INDEX TO EXHIBITS
Exhibit No.
Sequential Page No.
11 Computation of Per Share Earnings Page 16 of 18
27 Financial Data Schedule Pages 17
15
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
THE STRIDE RITE CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(In Thousands except Per Share Data)
Three Months Ended Six Months Ended
May 31, 1996 June 2, 1995 May 31, 1996 June 2, 1995
Net income applicable
<S> <C> <C> <C> <C>
to common shares $ 3,012 $ 4,001 $4,390 $ 8,976
Calculation of shares:
Weighted average num-
ber of common
shares outstanding 49,589 49,550 49,568 49,539
Common shares attri-
butable to assumed
exercise of dilu-
tive stock options
and stock purchase
rights using the
treasury stock
method 281 310 259 315
Average common shares
and common equiva-
lents outstanding
during the
period 49,870 49,860 49,827 49,854
Net income per common
share $.06 $.08 $.09 $.18
</TABLE>
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> NOV-29-1996 NOV-29-1996
<PERIOD-END> MAR-01-1996 MAY-31-1996
<CASH> 31,834 31,834
<SECURITIES> 25,615 25,615
<RECEIVABLES> 79,722 79,722
<ALLOWANCES> 6,757 6,757
<INVENTORY> 107,903 107,903
<CURRENT-ASSETS> 282,966 282,966
<PP&E> 86,357 86,357
<DEPRECIATION> 26,959 26,959
<TOTAL-ASSETS> 353,765 353,765
<CURRENT-LIABILITIES> 74,592 74,592
<BONDS> 0 0
0 0
0 0
<COMMON> 14,237 14,237
<OTHER-SE> 253,354 253,354
<TOTAL-LIABILITY-AND-EQUITY> 353,765 353,765
<SALES> 124,185 243,084
<TOTAL-REVENUES> 124,185 243,084
<CGS> 81,256 160,402
<TOTAL-COSTS> 81,256 160,402
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 214 858
<INTEREST-EXPENSE> 313 628
<INCOME-PRETAX> 4,188 6,209
<INCOME-TAX> 1,176 1,819
<INCOME-CONTINUING> 3,012 4,390
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,012 4,390
<EPS-PRIMARY> .06 .09
<EPS-DILUTED> .06 .09
</TABLE>
